RIVER STAGE PROJECT
Rainy River Gold Camp, north-western Ontario
In June, 2016, the Company entered into an option purchase agreement to acquire a 100% interest in a 2,480 acre mineral claim package located in the Dash Lake and Brooks Lake areas in the central part of the Rainy River Gold Camp, Ontario, approximately 90 kilometers southeast of the Town of Kenora, Ontario. This claim package will be called the “River Stage Property”.
The River Stage Property is surrounded by claims held by other exploration companies, and is immediately adjacent to claims held by Chalice Gold Mines Limited (“Chalice”) which hosts the Cameron Lake Gold Deposit (the “Cameron Deposit”). The Cameron Deposit is an advanced stage exploration project and an NI 43-101 report filed by Chalice in 2015 on the Cameron Deposit stated a measured and indicated resource of 569,000 oz. Au @ 2.26 g/t with an inferred resource of 894,000 oz. Au @1.92 g/t. On May 9, 2016 Chalice announced the sale of these claims and the Cameron Deposit to First Mining Finance Corp. for a reported deemed value of $13 million in an all-stock transaction.
The River Stage Property covers the junction of the Cameron Lake and Burdet Lake Faults. The Ontario Geologic Survey (“OGS”) recently released a new airborne geophysical survey over the Rainy River Gold Camp, including the River Stage Property, and the Company’s understanding is that the OGS will be conducting further field work in the Rainy River Gold Camp during 2016.
To the south-east of the River Stage Property, New Gold Inc. (“New Gold”) is constructing a new gold mine (the Rainy River Project) which, according to the New Gold website, contemplates a 2,100 tonne per day processing rate. This new mine is about 30 miles south-east of the River Stage Property, also in the Rainy River Gold Camp, with the New Gold claim boundary commencing about 15 miles south-east.
In order to earn its 100% interest in the River Stage Property, the Company must pay: $8,000 by June 15, 2016and 100,000 common shares of the Company upon signing of the agreement; $8,000 on the first anniversary; $12,000 on the second anniversary; and $25,000 on the third anniversary. In addition, a 1.5% net smelter royalty will be retained by the vendor which the Company may reduce by 50% by paying $250,000. The vendor is arms-length to the Company.
In 2017, the Company commissioned a review of available assessment file records and Ontario Geologic Survey data. A first stage exploration proposal has been requested which the company expects to include some combination of surface prospecting, geologic mapping, soil geochemistry and geophysics. The Company plans to complete some or all of the recommended program during 2017.